The effects of the war in Iran are hitting ordinary Americans. The sentiment index is at a record low
“Consumers continue to feel cost pressure, the main factor of which is rapidly rising fuel prices” – said the director of the study, Joanne Hsu, quoted by CNBC.
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University of Michigan index at record low
Closely monitored by the University of Michigan the consumer sentiment index reached a preliminary reading of 48.2 pointswhich means a decrease of 3.2%. compared to the previous record decline in April and by 7.7%. compared to last year.
Economists surveyed by Dow Jones expected a result of 49.7 points.
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Macronext
“Fears about inflation were the main factor influencing the continuing downward trend in consumer sentiment,” reports CNBC.
One third of respondents cited gas prices as their biggest cause for concern. However, another third also mentioned tariffs — both of these factors are related to President Donald Trump, who launched an attack on Iran at the end of February and in April 2025 announced an aggressive plan to introduce tariffs.
See also: Consumers cry and they make billions. This is how war drives business
“Events in the Middle East seem unlikely to significantly improve sentiment until supply problems are fully resolved and energy prices fall,” says Joanne Hsu.
Consumer sentiment in the US. There are positives
There were also some small positive signals in the study. The expectations index amounted to 48.5 points, which means an increase of 0.8%. compared to April and by 1.3 percent compared to the previous year.
In addition inflation forecasts have improved slightly, although they still remain at a high level: the one-year forecast is 4.5 percent and the five-year forecast is 3.4 percent, which means a decrease of 0.2 and 0.1 percentage points, respectively. compared to previous readings.
CNBC notes that Wall Street stock indexes remained positive after the publication of these results.
On Friday, a gallon of regular gasoline cost an average of $4.54 in the U.S., an increase of almost 40 cents from the previous month and almost $1.4. compared to the same period a year ago.
